Risk Off Mood as Traders Brace for Heavy US Data Flow
This week delivers one of the most important batches of US economic readings since the government shutdown delayed key releases. With inflation, consumer demand, and labor market resilience still unclear, traders are preparing for data that could confirm or challenge the soft landing narrative that has supported markets in recent weeks.
Key releases to watch:
- Consumer spending updates, including Cyber Monday performance
- Delayed inflation data, including the Fed’s preferred gauge
- ADP employment (Nov)
- ISM manufacturing & services surveys
- Industrial production (Sep)
This data will land just days before the Dec. 9–10 FOMC meeting, where policymakers debate whether to deliver a third consecutive rate cut.
Swaps markets now price nearly a full quarter point of easing, following dovish remarks from New York Fed President John Williams, who flagged more room to cut amid cooling labor conditions.
Fed Leadership Transition in Focus
Uncertainty over Federal Reserve leadership is adding another layer to the cautious mood.
White House economic adviser Kevin Hassett signaled that markets should be prepared for the announcement of a new Fed chair, reinforcing speculation that President Trump is close to finalizing his choice.
Hassett avoided confirming whether he is the frontrunner, but traders are increasingly positioning for a Fed that may lean more aggressively toward easing under new leadership.
BOJ Signals Growing Likelihood of December Rate Hike
In Japan, BOJ Governor Kazuo Ueda heightened expectations for policy action, stating the central bank will weigh the pros and cons of a rate increase at its Dec. 19 meeting. Markets now assign around a 64% probability of a hike.
Ueda’s direct mention of the upcoming meeting parallels his signaling last year just before the BOJ surprised markets with a tightening move suggesting a growing chance that Japan may continue normalizing policy after decades of ultra loose settings.
Soft Landing Still Intact, But Data Gaps Keep Risks Elevated
For now, the collection of delayed US releases still aligns with a soft landing: moderating inflation, steady spending, and labor-market cooling without recessionary signals.
This helped fuel the sustained equity rally into Thanksgiving.
But the lack of fresh, timely data over recent months means uncertainty remains unusually high. Even Fed officials entering the blackout period this week are relying on outdated figures, increasing the weight of every release ahead.
Chair Jerome Powell and Governor Michelle Bowman are scheduled to speak today, though both are barred from discussing the economic outlook or policy.
Bottom Line for Traders
This is a critical macro week, and the data released over the next several days will heavily shape December’s market direction.
With:
Fed rate cut expectations firmly in place
BOJ signaling potential tightening
Leadership shifts looming in Washington
And the US economy still operating in a data vacuum
Traders should treat this week’s releases as must watch catalysts before executing meaningful positions.
Disclaimer: This report is for informational purposes only. It does not constitute investment advice or represent the official views of any central bank or regulatory body.